Does market power explain margins in dual banking? Evidence from panel quantile regression
研究了双元银行体系中市场势力对净利差的影响，发现市场势力越大利差越高，且伊斯兰银行在高利差分位点上效应显著，对政策制定者和银行管理者有参考价值。
Abstract This paper examines whether banks with greater market power have more control over the net interest margin. To this end, we employ panel quantile regression (QR) to a sample of Islamic and conventional banks from 14 dual banking countries during 2005–2018. Our empirical findings show that greater market power in a dual banking system results in a higher net interest margin, which is in line with the mainstream theory of monopolistic competition. After introducing the Islamic interaction dummy in the model, we find that in the case of Islamic banks the result is significant only for higher quantiles of bank margins. This study also has some policy implications, namely that the concentration of market power can be countered by developing a competitive environment among the banks to have competitive bank margins. We further suggest that to get a higher profit margin, Islamic banks need to be more competitive and more efficient while deciding the profit margins.